Hasbro and Mattel, Inc., are the two largest toy companies in North America. Condensed liabilities and stockholders’ equity from a recent balance sheet are shown for each company as follows (in thousands):
| Hasbro | Mattel | ||||
| Current liabilities | $960,435 | $1,716,012 | |||
| Long-term debt | 1,396,421 | 1,100,000 | |||
| Deferred liabilities | 461,152 | 643,729 | |||
| Total liabilities | $2,818,008 | $3,459,741 | |||
| Shareholders’ equity: | |||||
| Common stock | $104,847 | $441,369 | |||
| Additional paid in capital | 655,943 | 1,727,682 | |||
| Retained earnings | 3,354,545 | 3,515,181 | |||
| Accumulated other comprehensive loss and other equity items | (72,307) | (464,486) | |||
| Treasury stock, at cost | (2,535,649) | (2,152,702) | |||
| Total stockholders’ equity | $1,507,379 | $3,067,044 | |||
| Total liabilities and stockholders’ equity | $4,325,387 | $6,526,785 | |||
The income from operations and interest expense from the income statement for each company were as follows (in thousands):
| Hasbro | Mattel | |||
| Income from operations (before income tax) | $453,402 | $945,045 | ||
| Interest expense | 117,403 | 88,835 | ||
a. Determine the ratio of liabilities to stockholders’ equity for both companies. Round to one decimal place.
| Hasbro Inc. | |
| Mattel Inc. |
b. Determine the number of times interest charges are earned for both companies. Round to one decimal place.
| Hasbro Inc. | |
| Mattel Inc. |
